In his Eighth State of the Country Address on 30th Nov this calendar year, President Uhuru Kenyatta submitted a report to the parliament recognizing Micro, Compact, and Medium Enterprises (MSMEs) as the lifeblood of Kenya’s financial state still a massive selection of them are unlicensed.
According to the 2017 Financial Study, there are about 1.56 million licensed MSMEs and 5.85 million unlicensed similar enterprises in Kenya.
This means that much less than 27 percent of all corporations in Kenya are registered. Out of these, 92.2 percent are micro-enterprises while only 7.1 per cent and .7 per cent are small and medium enterprises respectively.
The cause some of the MSME operators give for not registering their firms is that they worry remaining subjected to high taxation that could stop up ingesting on their income.
On the other hand, as you will shortly explore, there are lots of positive aspects that await unregistered MSME operators as taxpayers that together with loans and federal government products and services.
Bid for governing administration contracts
As a registered compact organization operator as a taxpayer, you will be placing you in the greatest placement to bid and acquire governing administration tenders and trade with the governing administration and non-authorities establishments.
If your enterprise is not registered, you cannot bid for authorities contracts or even lover with other corporations to choose benefit of communal rewards such as essential networks, particularly with greater corporations with who they could even enter into sub-contracts.
Hence, you will continually be locked out of useful business enterprise associations. Only put, if an enterprise is not a taxpayer it simply cannot mature!
Individualized tax and customs advisory expert services
These are products and services supplied by the Kenya Earnings Authority (KRA) by way of its broad network, social media, and telephony between some others to hell MSMEs operators fully grasp the tax and customs setting particularly if they intend to get into import and export company.
This is in addition to marketplace and networking possibilities via its taxpayers’ roundtables that the taxman organizes to provide with each other companies for reasons of sharing troubles influencing them and obtaining business assistance in line with the main organization of the authority.
It is all through these conferences that the Authority avails alternatives for business owners to community and even build new markets.
Import and export incentives
As a tiny enterprise operator, your goal is to improve from serving the local people today to executing company globally. No business operator would their undertaking continue to be stagnant that’s why the have to have for registration.
MSMEs registered with the taxman stand the prospect of acquiring import incentives that include decreased import tariffs on inputs this sort of as machinery and raw products to spur manufacturing of products for export where by the authority offers cost-free VAT for its associates.
The taxman also has a provision for cash allowances on put in machinery and a probable 20 per cent export payment arrangement.
Several organization opportunities
Did you know? In line with the govt directive on general public procurement, 30 per cent of all procurement at KRA goes to enterprises operate by the youth, ladies, and persons with disabilities which are mainly MSMEs. Another cause why you want to sign up as a compact business enterprise operator.
Unregistered enterprises ought to sign up as taxpayers in buy to open up doors to business options that can only be accessed when the small business acquires the all-important PIN selection.